The central bank's new governor Ms Nor Shamsiah Mohd Yunus said the objective of the divestment remains intact, but instead of imposing the deadline of 30 June 2018 for all foreign insurers to reduce their stakes, it will be based on the respective agreements between the foreign insurers and BNM. It will depend too on the divestment options chosen by the insurance companies.
Speaking at a press conference last week on the economy, Ms Nor Shamsiah said a company might choose a complicated option that requires multiple layers of approvals from both domestic and foreign regulators, thus the firm may be given one year to complete its divestment.
Another company that opts for a direct stake sale and has already identified a buyer would be able to complete the divestment within a shorter period of time.
"The divestment commitment was something that they made with the central bank…it was their commitment to divest. We're still in discussion. The objective of that divestment is still relevant," Ms Nor Shamsiah said. Some of these commitments made between insurance firms and BNM were agreed on as far back as 20 years ago, she added.
“There are some insurance companies that didn’t make the commitment. They will not be bound by the divestment,” she added, without revealing the names of exempt companies, if any.
At present, there are 11 Malaysia-incorporated insurers wholly owned by foreign entities.
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